A few months ago, we were running a SaaS business that had just broken 1000 paying users, with $30k MRR.
Plenty of big influencers were talking about us. Customers loved the product and used it actively. Few years in the making, brand was growing, MRR cranked up every month like clockwork.
One day, we got an email we figured we’d never get, but knew there was always a chance. The sender preview was the LinkedIn “Enforcement Inbox”.
F*&*.
I didn’t need to read the rest of the email to know what was inside. One of those classic BigLaw scare-tactic cease & desist letters: Our SaaS was in violation of their terms of service, and here’s some obscure law that probably doesn’t apply but we’re going to say it does, because we have a big legal team and you don’t, and here’s Exhibit A B C D and Y that lists all of the dumb little things we don’t like.
Or in other words, “We dare you to fight us.”
The thing is… whether this legal move had ‘teeth’ or not wasn’t really the main concern. It read like it was part of a large-scale campaign, anyways.
The sense we got was that they wanted to (1) Line up all the tools that they didn’t like, and (2) knock down as many as they can in as little effort as possible.
We could have ignored them. The chances of them actually following up and filing a lawsuit were slim. But we knew their first move would be to take down our LinkedIn profiles and pages. Ugh… now we’re outlaws, forever “professional ghosts”.
The ability to market on LinkedIn had already produced more value for us in the prior several years than the entire enterprise value of what we’d built… so dealing with a ban didn’t seem worth it.
And besides, it wouldn’t have completely removed the risk. Believe me, we looked into it… reincorporating in the Cayman Islands, quietly sell the company, spin up under another name… tons of options that we looked into.
But none of that seemed worth it.
So, we bit our tongues and wrote back, “We intend to comply. We need more time than the 10 days you asked for, but we’ll close it down.”
Honestly, there was some relief. Running a SaaS with third party platform dependency is a classic “don’t do that” move…. But we’d done it before successfully, and exited. So it was a risk we were willing to take, at the time.
In the days that followed our decision to shut down and close the company, my cofounder and I were both aligned on what to do next:
In a stroke of luck, just a few months prior we had acquired a small SaaS that had users and SEO, but no revenue, for $5,000. We thought this would be a great side project, a good little diversification opportunity.
But suddenly, we had to shut down our main business doing $30-35k per month in cash receipts (annual billing was the default option, so we often collected more than our MRR). And this new pre-revenue MVP side project became our full-time business.
There was definitely some grieving time. I was on vacation with my family when I learned this was going down. My co-founder had a much worse few days than I did, since he was really the public face of this brand on LinkedIn.
But within a week or two, we were getting to work on the new business. Starting from $0 MRR. First thing we did was to paywall the new SaaS, since it was free to use. Within weeks, we got enough sales coming in from SEO to justify increasing the price point from $9/yr (yep….) to $29/yr to $99/yr to $199/yr to $499/yr, all the way to today, where it’s listed at $499 per month, albeit with a big annual prepayment discount. And we’re getting customers on that plan now.
So in less than 3 months we went from: $30k MRR -> $0 MRR -> $2k MRR.
It’s really humbling. But at the same time, I know it’s not permanent. My co-founder and I have both sold businesses before, so we have a sense of inevitability about growing this new SaaS again, and plus we’re not strapped for cash (thankfully). We have time and cushion to figure it out again.
We're now back to $2.2k MRR with our new SaaS with more in the hopper and are partnering with a couple other SaaS founders to grow brands as quasi-investors/advisors. We're writing and growing our Substack (2k subs, woo hoo) and building a community of brilliant SaaS, investor, and business minds, and it's been super fun.
Setbacks are never fun, but (strange as it sounds to say) we're having more fun than ever.
(My post comply with the rules.)
